The Effect of Company Characteristic and Corporate Governance Mechanism on Firm Value with Sustainability Report Quality as Intervening Variables

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 2

Year of Publication : 2020

Authors : Yohana Premavari , Wiwik Utami

10.14445/23939125/IJEMS-V7I2P117

How to Cite?

Yohana Premavari , Wiwik Utami, "The Effect of Company Characteristic and Corporate Governance Mechanism on Firm Value with Sustainability Report Quality as Intervening Variables," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 2, pp. 111-122, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I2P117

Abstract:

This study aims to examine and analyze the effect of company characteristics and corporate governance mechanisms on firm value with sustainability report quality as an intervening variable. The Samples is a manufacturing company listed on the Indonesia Stock Exchange (IDX) from 2015 to 2017. The analysis method used is path analysis. The test result shows that company characteristics that are proxied by company size have a significant positive effect on the quality of sustainability reports and a significant negative effect on firm value. At the same time, the company's growth does not affect the quality of the sustainability report and firm value. Corporate governance mechanisms that are proxied by institutional ownership, frequency of committee meetings, audits, and remuneration of directors have a significant positive effect on the quality of sustainability reports. Institutional ownership and remuneration of directors have a significant positive effect on firm value. The frequency of audit committee meetings has a significant negative effect on firm value. The quality of sustainability reports can mediate company size, institutional ownership, frequency of audit committee meetings, and remuneration of directors to firm value. The quality of the sustainability report cannot mediate the company's growth to the firm's value.

Keywords:

institutional ownership, frequency of audit committee meetings, company size, company growth, remuneration, sustainability report, firm value.

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